What can my grandmother do? Her mortgagee is not paying?

I am wondering what my grandmother can do in this situation.

My grandmother used to live in a house in Ringwood, NJ, a very nice house. When she retired she moved out into a retirement community. She sold the house to a man and his family a few years ago. The house was entirely paid off, every single red cent was paid to her mortgage company.
The man who bought the house from her was not able to get a good mortgage, so my grandmother took one out for him. They both met with a lawyer who worked out the contract and how much he would pay to her and for how long until the mortgage was paid off, in which case it would become his house. She still owns the house, legally.
For the past few years the payments have not been coming on time and sometimes not at all. She has been very nice about it for the past few years, but she is fed up with it. My grandmother is paying my sister's student loans and she wants to make payments on time. My grandmother also has to pay monthly maintenance and living fees to the retirement community, and she is leasing a car. My grandmother says that for her entire life she has lived within her means and always made payments for things on time. But now she isn't able to because this man isn't sending her the money. He does eventually send all of the money, but sometimes he does not send a payment for 6 months and then he will send one large payment, which is not what they agreed upon. She is really fed up and wants to do something.

What can she do?

Mutt

She needs to look over the contract and find out what her options are. Can she charge late fees (maybe even with interest)? If he has to pay more than the normal amount, it could be an incentive to pay on time.

She should also look at when she would be allowed to foreclose. Just making a threat of doing it (make sure she can in case she has to follow through) could be enough to get him paying her again.

And, maybe see if she can sell the note to someone else or a bank. I don't know how you would go about this, but I know banks sell mortgages to other banks all the time. She may not get the full value of it, but she would not have the headache of dealing with it.

Golden

surely the contract covers this. six months is way out of line. if he doesn't pay, he loses the house. she just needs to enforce the contract.

laughter_every_day

Foreclose. Same as any other lender. Read the mortgage and it will spell out all the obligations of both parties. If she thinks the person has breached, then she should foreclose. She will certainly need a lawyer because the laws and procedures governing foreclosure are very strict and complex, but that is what one does in that situation. Once she starts the process, she can then negotiate. For example, she can agree to stop the foreclosure if she gets six months of payments in an escrow account, and the account never falls below five months of payments.

Susieq

I believe she can take the House back and resell it. He loses any Monies he may have paid as the Bank would do the same. She just has to go and file the papers as he breached the contract unless she want to work something out. But its getting too hard for your Grandmother to handle all these bills and causing her problems with her living as well, So I think she would be best off reselling the house even at a lower price. Its just sort of like she rented it and did not receive all the money she should have. But it may turn out the same in the end. She can check with her Lawyer how to do this or even a Real Estate Broker may be able to help her handle some of this.

truthinessmaybe

It sounds as if she got scammed, I'm sorry to say. That said, your explanation of the facts is not entirely clear, for instance: you say a man "bought" the house from her, yet "she still owns the house, legally." I don't know NJ law, but it's probably one or the other.

Does the man have a lease to own contract?

A homeowner / borrower is called a mortgagor and a bank or lender is the mortgagee. Is she the mortgagee? Does she actually hold the mortgage? If she does, she may be able to hire a lawyer and foreclose.

You say she and the guy went to see "A" lawyer.... whose lawyer was it? Grandma's or the man's? She should have had her own.

You say your grandma "took out" a mortgage for the man. Does that mean that grandma signed the promissory note (i.e. the promise to pay the bank back its money plus interest) and the mortgage itself (the document that gives the BANK a security interest and the right to foreclose?) This is likely what happened if indeed grandma is the owner. If so, the guy is probably just a tenant. If so, and he's not paying his rent, grandma may be able to evict him.

Grandma needs to see a lawyer. Her own lawyer.

Mr G

Your best to see a Lawyer and see what he can do

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